Voyager Digital, a provider of digital currency trading services, saw its shares plunge 34% on Tuesday after the company said it was limiting some of its services due to “unprecedented” market conditions.
The company’s stock was down 34% at $0.39 in mid-day trading on the Toronto Stock Exchange.
Voyager said it was suspending customer withdrawals of bitcoin, ether and other digital assets for 48 hours due to “significant withdrawal requests” and to allow it to replenish its liquidity.
The company also said it was halting all margin trading and short selling on its platform.
The move comes as the cryptocurrency market has been roiled by a sell-off over the past week, with bitcoin tumbling more than 30% from its all-time high of nearly $65,000 reached just a week ago.
Voyager’s difficulties have been exacerbated by its exposure to the crypto hedge fund Three Arrows Capital (3AC) in June, when it issued a notice of default on a $650 million loan.
On Monday, the firm filed for Chapter 15 bankruptcy, before 3AC obtained an assignment for relief from debtors.
Voyager said it is “working diligently” with its advisers to address the 3AC situation and is taking steps to protect its interests, including reducing its exposure to the fund.
The company has also retained Houlihan Lokey as financial adviser to assist with a review of strategic alternatives.
“We remain focused on executing on our strategy and providing the best possible experience for our customers,” Ehrlich said.
Voyager token (VGX) has declined about 59% since June 1, when it was trading at $0.095. The digital asset is down about 88% from its all-time high reached in January. VGX downfall is not only a threat to its founders but also a great hit to its investors.
The recent market crash has caused many investors to lose a lot of money and some even going bankrupt, which is why the company has decided to limit its services. This is to prevent any more losses from happening and to try and recoup whatever they can.
It is not just Voyager that is affected by this, but other digital currency providers as well. Other digital currencies including ether and dogecoin have also slumped in recent days.Many have seen their shares drop significantly in the past week.
It is unclear what the future holds for Voyager and other digital currency providers. With the market in such a state of flux, it is hard to say how long this downturn will last or how severe it will be. However, one thing is certain: the digital currency markets are in for a bumpy ride.